You have been asked to take part in an upcoming Young Professionals meeting in your area. The program planned for the evening focuses on today’s manufacturing environment. Specifically, you have been asked to explain how manufacturing firms determine how much it costs to make their product and why some costs are initially recorded as inventory while other costs are expensed immediately. The program director would like for you to (1) discuss the rules for determining whether a cost should be treated as a product cost or period cost and (2) explain the types of costs that would be included in each category, how each flows through the accounting system, and the implications of the distinction between product costs and period costs for financial reporting (income statement versus balance sheet).

You will have 15 minutes for your presentation plus a 15-minute question-and-answer period at the end. Your audience is composed primarily of entry-level production personnel although people from other ields (marketing, human resources, production, etc.) will be attending. Assume that they all have some familiarity with accounting but few are practicing accountants.

Required:

1. Prepare a detailed outline identifying your topic of discussion.